Analyzing the Impact of Changing Tastes and Expectations on Demand

A shift in the supply curve is called a change in supply.

A movement along a fixed supply curve is called a change in quantity supplied.

A shift in the demand curve is called a change in demand.

<p>A movement along a fixed demand curve is called a change in quantity demanded.</p> Signup and view all the answers

<p>Equilibrium refers to a situation in which the price has reached the level where quantity supplied equals quantity demanded.</p> Signup and view all the answers

<p>The equilibrium price is the price that balances quantity supplied and quantity demanded. On a graph, it is the price at which the supply and demand curves intersect.</p> Signup and view all the answers

<p>The equilibrium quantity is the quantity supplied and the quantity demanded at the equilibrium price. On a graph, it is the quantity at which the supply and demand curves intersect.</p> Signup and view all the answers

<p>The price falls when there is a surplus because there is an excess supply of goods or services, leading producers to lower their prices in order to sell more.</p> Signup and view all the answers

<p>The price rises when there is a shortage because there is an excess demand for goods or services, leading producers to raise their prices in order to maximize profits.</p> Signup and view all the answers

<p>Mutually beneficial exchange drives the market towards equilibrium.</p> Signup and view all the answers